Web sites offering streaming video of TV shows have since revolutionized the way in which viewers watch TV shows and movies. High-powered companies such as Hulu and Netflix have caused a number of U.S. households to get rid of their cable, satellite, or high-speed television services altogether. The number of U.S. households to follow this trend is predicted to double in the upcoming years. However, these companies providing online video-streaming have experienced growing pains regarding revenue. They have had to charge users a higher fee for their services because the main source of revenue, advertising, is not generating enough money to satisfy all of the content suppliers.
As is stated in the article, the company used to have a major competitive advantage in terms of movie selection, where, “…customers could browse through thousands of titles…” (Hitt 106). Now, the entire scope of the market has changed and Blockbuster was much too slow to respond. The recent moves that it has made will surely generate profits, but not enough to sustain the company in the long run, seeing as there is nothing that differentiates Blockbuster’s services from that of its competitors. In order to fully gain lost market share back, the company would have to create some sort of highly innovative way of viewing or renting movies that none of its competitors has already thought of; It would have to be something that is rare, difficult to imitate, not easily substituted, and able to generate above-average returns. Unfortunately, at this point it looks as if none of this will come into fruition because Blockbuster has essentially decided to latch on to other companies, creating a sort of symbiotic relationship where the company feeds off of the success of its competitors.
1. Threat of New Entrants: Because firms like Blockbuster and Redbox are so well known and have a reputable name, I think the threat of new entrants is fairly low. Not to mention, the increasing trend toward subscriptions, internet streaming, and video on demand will most definitely prevent more movie rental firms from entering the marketplace. Threat of Substitute Products: The threat of substitute products is relatively high in the movie rental marketplace as a whole. With firms like Netflix, there is an increasing amount of consumers who pay for a subscription and can stream movies directly to their TV, computer, tablet, or even cell phone.
With many other movie rental businesses in the market, it can make it harder for a business to keep running its business. Competitors such as Red box which have no fees or monthly plans to rent a movie because most people would prefer to rent from Red box than pay for a plan from Netflix. The five- forces deals with competition from rivals, in this case new movie rental businesses can make it harder on Netflix, by competition of current rivals. Such as, Blockbuster or Redbox. Although Blockbuster is not really doing well in business as of today.
Date： Feb.16th 2011-2-18 To : Sabine Turnley From: Vincent Xu Re： Case Analysis：Competition in the Movie Rental Industry in 2008: Netflix and Blockbuster Battle for Market Leadership Executive Summary The movie rental is the most popular way to watch movies outside a theatre in the U.S. As the improvement of technology, this industry has been increasing in market position of the whole movie industry and cutting the sales of movie DVD. In this Memo, I will first give a overall analysis of the entire industry, identifying the upcoming trends, specifically addressing the competitive factors, the driving forces, and the key success factors of this industry. After that, the analysis will go to the two main competitors in this industry, Netflix and Blockbuster, about their strength and weakness, future opportunities and threats, and their current financial performances. Finally, I will give some advice to recommendation to both companies based on the conclusion of the analysis. Analysis The competitive forces of this industry, which mainly come from rivalries and suppliers, are relatively strong, and thus make this industry highly competitive.
Weaknesses: 1) Service provided to Internet users only 2) Shipment/delivery time, slower delivery service. 3) Inability to rent new releases in a timely manner. 4) High cost of building a DVD library to support the growing subscriber base. 5) Rental period was inconvenient for some customers. Opportunities: 1) The rapid adoption rate of DVD players among U.S. households 2) New relationship with studios, Netflix transition to revenue-sharing agreements with the major studios.
Netflix and other Companies; Marketing Intermediaries at a Glance To provide easier access to most of the top movies companies such as Netflix, Inc. Amazon.com, Inc., and many other Kiosks appeared. Netflix, Inc. provides subscription based Internet services for TV shows and movies in the United States and internationally. The company allows its subscribers to watch unlimited TV shows and movies streamed over the Internet to their televisions, computers, and mobile devices. To keep up with the fast paced consumer environment, companies such as Netflix had to create integrated marketing strategies to promote business to the average consumer who have no extra time to spend in line at the local video store. Netflix, Inc. appears to fit the marketing concept of marketing intermediary.
Pornography is a multi- billion dollar industry that is generating enormous profit margins and has created employment opportunities nationwide. Porn makes enormous amounts of profit and annually which is around eight billion dollars a year. Playboy and penthouse sold more than times and news week put together. It not only plays a large part in the American economy but also it creates large amounts of jobs. These jobs include the actually porn stars or stripper’s themselves, but also the people you don’t see in the films like managers, photographers, editors, and people in video production.
To begin, TV programs reduce the quality of real life (According to the statistics, the average Irish child watches 26 hours a television per week.) In particular, the do this by narrowing people’s outlook, limiting the variety of free time activities, affecting family relations by reducing conversation, and even having an impact on health by discouraging exercise. Secondly, Violence and sex shown on television results in higher rate of crimes and encourages antisocial behavior. This is especially evident in the U.S.A and other western countries. Many criminals confess that their violent actions or attitudes to women were encouraged by TV.
Competition in the Movie Rental Industry: Netflix and Redbox EXECUTIVE SUMMARY This analysis will cover the movie rental industry and providing recommendations to Redbox and Netflix. Movie rental industry is rapidly changing much of the once dominant force in movie rental Blockbuster is slowly shifting to the now increasing power house Netflix for most consumers’ movie rental choice. The recommendations for Netflix in order to maintain its dominance in the field is to maintain its low cost in subscription, increase its video library, collaborate with Television providers to incorporate Netflix directly into the Televisions. Recommendations for Redbox is to maintain its kiosk location, but also move into internet streaming where they provide newer movies for its same one dollar fee. ANALYSIS Netflix, Redbox and Competitors Netflix is the world’s largest subscriptions service for streaming of online movies and TV episodes as well as sending DVD’s through mail.